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Russia Buys Back Pavel Borodin From The Swiss

by Natalia Smolenska, Tax-News.com, Moscow

16 April 2001

In a bizarre ending to an unusual case of state kidnapping, the Swiss have let Mr Pavel Borodin go after he told a judge that he wasn't going to answer any questions. The judge, evidently a highly pragmatic man with the interests of the Swiss Treasury at heart, decided that it was better to rake in some money rather than keep Mr Borodin expensively in prison, and gave him bail without any travel restrictions in exchange for SFr5m, which was promptly paid by the Russian Government. "Mr Borodin told the judge he refused to answer any of our questions so we are not expecting him to come back to Geneva," said Bernard Bertossa, the chief prosecutor in Geneva. So why did the Swiss arrest him in the first place? Presumably not in order to win SFr5m?

It would have been different in former times: most governments wouldn't have hesitated to torture a state prisoner before getting the ransom money anyway, and some modern governments would do the same.

What is the truth of this amazing affair? The outward facts are known, but they don't add up.

Mr Borodin, a close ally of Boris Yeltsin, the former president, was arrested in January on a international warrant issued by Swiss prosecutors when he arrived in the US on a private invitation to attend the inauguration of President Bush. He is alleged to have received $25m from Mabetex and Mercata, two construction firms, in exchange for granting them contracts to renovate the Kremlin's Great Palace, the State Audit Chamber and other property under his management. Mr Borodin has denied any wrongdoing.

After some legal wrangling in New York, he consented to be extradited, and flew to Switzerland on April 7th under guard, since when he has been treated for chest pains in a prison sanatorium. The 54-year-old was officially indicted by Swiss prosecutors last weekend on charges of money laundering.

Swiss prosecutors said they believed that the Russian government had no wish to let Mr Borodin testify. "It would be in his interest to explain himself but it would probably embarrass Russia's political and judicial establishment if he did," said Mr Bertossa. Mr Borodin was a popular man when he headed the Kremlin agency and he has kept good contacts in Moscow since.

But not popular enough to stop someone setting him up for the arrest at JFK in January. At the time there was speculation that the Kremlin was responsible; but that theory doesn't hold up when they've just paid nearly $3m in cash to get him back. He flew to Moscow from Switzerland yesterday. So who was it? Perhaps a member of the Family? Probably we will never know.

President Vladimir Putin, who worked for Mr Borodin as a deputy for eight months between 1996 and 1997, has not commented since his arrest in January. As for Mr Borodin, who has remained polite, phlegmatic but tight-lipped throughout - well who could ask for a better lieutenant? Perhaps he will now disappear into the comfortable world of retired Kremlin insiders, or perhaps he will be rewarded with another job. Or does he in fact have his $25m in a Gibraltar account?

So many questions, and no answers . . .


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